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We blame lazy workers, empire-builders, and red tape. But bureaucratic inefficiency has a deeper structural explanation: when decision demand exceeds capacity, rules substitute for judgment—and once they're in, they don't come out.
Popular explanations for bureaucratic inefficiency all have gaps.
Bureaucrats don't work hard enough
But: But many bureaucracies are full of dedicated, overworked people
Managers create unnecessary complexity to justify their roles
But: But complexity often emerges without anyone wanting it
Excessive rules created by regulators who don't understand real-world needs
But: But rules often emerged to solve real problems—the question is why they accumulate
Bureaucrats won't take chances, so processes multiply
But: But risk aversion is often rational given the incentives—why are incentives that way?
IRSA research traces bureaucratic inefficiency to a four-stage sequence:
Decision demand exceeds processing capacity. More cases come in than the bureaucracy can thoughtfully judge.
To cope, judgment gets replaced with rules. 'Let me think about this' becomes 'policy says no.'
Each rule reduces flexibility. Exceptions require new rules. Complexity compounds.
The system now runs on rules, not judgment. Even when capacity exists, the rules remain. Inefficiency becomes structural.
Key insight: Inefficiency isn't created by bad people. It emerges when overwhelmed systems substitute rules for judgment—and then can't remove the rules because removing them would require the judgment they no longer have.
Each incident creates a new form. Forms never get retired. Staff spend more time on paperwork than work.
IRSA analysis: Forms are substitutes for judgment—easier to check a box than evaluate a situation.
Decisions require multiple sign-offs. Each layer was added after something went wrong. Nobody can remove layers.
IRSA analysis: Approvals distribute blame but consume capacity. The chain grows but judgment shrinks.
Rules have exceptions. Exceptions require documentation. Documentation requires review. Simple cases become complex.
IRSA analysis: Exceptions are attempts to restore judgment. But they add process rather than removing rules.
When decision volume exceeds processing capacity, bureaucracies substitute rules and procedures for judgment. Each substitution reduces flexibility, creating the rigidity we call 'inefficiency.' It's not about lazy people—it's about structural overload forcing rule-substitution.
No. The inefficiency is structural, not motivational. Even highly motivated bureaucrats face rate-limiting: there's only so much judgment bandwidth available per unit time. When demand exceeds bandwidth, rules substitute for judgment regardless of work ethic.
Yes, but not through 'cutting red tape' alone. Efficiency requires restoring judgment capacity—which means reducing decision load, not just simplifying existing rules. Adding more rules about 'efficiency' typically makes things worse.
Because each rule serves a purpose (avoiding some past failure). Removing rules requires judgment about which ones matter—but judgment is exactly what's scarce. The bureaucracy lacks the capacity to evaluate its own complexity.
IRSA's research on rate-limited systems and authority capacity explains why bureaucracies calcify—and what structural changes can restore judgment.